Grayscale Solana Trust Trading At A Mega 650% Premium: What’s Going On?

Although Solana is currently in the red, the coin is a top performer: Over the past year of trading, SOL, the native currency of the Solana ecosystem, has risen more than 15x, quickly rocketing to fifth place in the cryptocurrency rankings, surpassing XRP, Cardano, and even top meme coins like Dogecoin.

GSOL is trading at a 650% premium

We may see more developments for SOL in the coming weeks: Data shows Grayscale Solana Trust (GSOL) is trading at a 650% premium to its net asset value (NAV).

Jamie Coutts, chief crypto analyst at RealVision, said: spike The rise in NAV premium follows a wave of spot Solana exchange-traded funds (ETFs) in the U.S. and Canada.

GSOL is trading at a premium | Source: @Jamie1Coutts via X

To understand what’s going on, the GSOL NAV generally represents the total value of all SOL held by the trust divided by the number of GSOL shares outstanding. If GSOL is trading above or below NAV, it will be sold at a discount. or Huge premium.

When GSOL trades above its NAV, it means that it is available at a premium price and people are willing to pay more for the underlying asset (SOL in this case).

GSOL is currently selling at a premium due in part to its limited supply, and only a few shares are available for trading, unlike SOL, which can be traded for free on multiple cryptocurrency exchanges such as Binance and Coinbase.

Therefore, institutional investors expecting prices to surge in the coming months will have to compete with other investors to gain exposure to SOL via GSOL, potentially driving up premiums.

Focus on Spot Solana ETF filings in the U.S. and Canada

Expectations are growing that Solana could outperform Bitcoin and Ethereum in the coming months, potentially boosting earnings in the first quarter of 2024. This preview follows the decision by VanEck and 21Shares. File The company filed to trade a spot Solana exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC) in late June.

VanEck, through its head of digital asset research, Matthew Siegel, said: Said The company’s products aim to leverage Solana’s decentralization, practicality and economic viability, adding that SOL is eligible to become a commodity like Bitcoin.

Solana price trending down on daily chart | Source: SOLUSDT on Binance, TradingView
Solana price trending down on daily chart | Source: SOLUSDT on Binance and TradingView

Even with this filing, it is unlikely that a physical Solana ETF will be approved by strict regulators. Unlike Bitcoin and Ethereum, whose futures products are sold on the CME, SOL is not listed on an exchange. At the same time, the U.S. SEC listed SOL as one of several unregistered securities when suing Binance and Coinbase.

Featured image from Canva, chart from TradingView

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